PancakeSwap surges on Binance Labs investment
Binance’s venture capital arm announces investment in decentralised exchange
PancakeSwap’s cryptocurrency $CAKE traded 9.7% higher by noon on Monday, reaching $4.78.
In part, this momentum came as a result of a 5.6% rise in the total cryptocurrency market capitalisation to $1.29trn (£960m). However, it was also driven by the news that Binance Labs will invest further in the utility and governance token.
Although it did not put a figure on its investment, the venture capital and incubation arm of the world’s largest cryptocurrency exchange said that the investment is part of its mission “to facilitate the next wave of global blockchain adoption”.
To do this, it committed to “providing technology development, marketing and community support and enterprise solutions for Web3 transformation”.
PancakeSwap is a decentralised exchange built on BNB Chain, Binance’s smart contract blockchain. It enjoyed substantial growth throughout 2021, reaching a market capitalisation of $6.8bn.
The onset of the ‘crypto winter’, however, has seen this metric steadily decline. On Saturday, its market capitalisation sank to $691m, its lowest level since February 2021.
What is your sentiment on CAKE/BTC?
$CAKE has followed this volatility. Even after Monday’s jump, the cryptocurrency stood 89% below the $44.18 all-time high that it reached in April last year.
In February, Ethereum co-founder Vitalik Buterin stressed the positive attributes of the imminent ‘crypto winter’. He argued that it would ultimately result in better projects, as lower values would force developers to pay greater attention to improving technologies.
Although some funds and retail investors may be reeling from their haemorraged holdings, other institutions are using the recent sell-off to position themselves for the next bull run.
The head of Binance Labs, Bill Qian, stated: “PancakeSwap has been leading the development and mass adoption of BNB Chain. Given that PancakeSwap is the most widely used dApp [decentralised application] and the DeFi [decentralised finance] project with the highest TVL [total value locked] on BNB Chain, we have and will continue to provide strong support for the project.”